Judgments - Burton v. Mayor etc. of The London Borough of Camden

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    Before 1925 it had been held that an assignment of a partner's beneficial interest in a lease on the dissolution of the partnership to his former partner was a breach of a covenant not to assign the lease: see Varley v. Coppard (1872) 7 C.P. 505. I do not think that the case is of any authority today. Although the partners were joint tenants at law (though not in equity) the basis of the decision was that it would have been a breach of the covenant for either of them to have severed the joint tenancy and assign "his undivided moiety" to a stranger. Quite apart from the faulty logic involved in the extrapolation from a transaction which introduces a new lessee to one which does not, since 1926 it has not been possible to sever a joint tenancy at law.

    This, however, only provides the starting point for the question which now falls for decision, which is concerned with the meaning of the word "assigned" in section 91(1) of the Housing Act 1985. It is necessary to examine the statutory context both textual and in terms of legislative policy to see whether they require the word to be given an extended meaning which it would not normally bear.

    Part IV of the Act creates the concept of a secure tenancy. Section 91(1) makes a secure tenancy incapable of assignment. A purported assignment does not merely constitute a breach of statute. It does not effect an assignment of the tenancy. The Deed of Release signed by Miss Hannawin, however, does not come within the statutory language. The deed is not and does not purport to be an assignment of the tenancy. Miss Hannawin was not the secure tenant. The tenancy was not hers to assign. Even if the deed is treated as an assignment, it cannot properly be treated as an assignment of the tenancy, but only of her interest in it.

    In my opinion section 91(1) cannot be made to include the release of the interest of a joint tenant without doing considerable violence to the language. It is necessary not only to give the word "assign" a special meaning to include the execution of a document which assigns nothing but to treat the words "A secure tenancy" with which the subsection opens as including an interest in a secure tenancy. This is very difficult to do as a matter of language. It is impossible elsewhere in the section (see for example subsection (2) where "tenancy" plainly means the tenancy itself) or in section 88(1), where the case of joint tenants is dealt with in paragraph (b) but not elsewhere. Throughout Part IV the draftsman has been careful to distinguish between the assignment or devolution of the tenancy itself and the case where a joint tenant becomes the sole tenant, where the tenancy does not change hands.

    Local authority housing is commonly let to two or more joint tenants, usually but not necessarily husband and wife or persons living together as husband and wife. Section 81 ("the tenant condition") expressly contemplates the grant of a secure tenancy to joint tenants. Section 88(1)(b) makes specific provision for this situation. It provides that a joint tenant who has become a sole tenant is to be treated for the purpose of succession to the tenancy as if he were himself a successor. The subsection is not limited to the more usual case where the successor has become sole tenant on the death of the other co-owner. Its language is appropriate to include the tenant who becomes the sole tenant on the release of the other's interest.

    It was submitted on behalf of the Council that section 91(3) (which permits the tenancy to be assigned in pursuance of a property adjustment order in connection with matrimonial proceedings whether here or abroad) shows that the prohibition on assignment covers the release of the interest of one joint tenant to the other. This would be so if every such assignment would necessarily be made by one joint tenant to the other, for unless this was prohibited by subsection (1) there would be no need for subsection (3). But that is obviously not the case. There must be a huge number of tenancies of local authority housing where the occupiers are husband and wife and yet the tenancy is in the name of only one of them. There must be many cases where the sole tenant has married since he took the tenancy. Section 91(3) would be needed to cater for such cases whether or not section 91(1) prohibited a joint tenant from releasing his interest.

    My Lords, Part IV of the Act is concerned with security of tenure. It is not concerned with housing benefit or under-occupation of local authority housing. It applies to tenants who are not in receipt of housing benefit in like manner as it applies to tenants who are. A reduction in the number of joint tenants whether by death or by the release of his interest to the other may lead to under-occupation and the under-provision of housing benefit, but any statutory resolution of these problems lies outside the scope of Part IV.

    In the case of a joint tenancy the tenant condition in section 81 is satisfied even if only one of the joint tenants occupies the premises as his only or principal home. It permits one of the joint tenants to vacate the property without jeopardising the security of tenure enjoyed by the other. What possible reason can there be to prohibit a joint tenant who is not in occupation of the property from releasing his interest so as to constitute the only occupier the sole tenant?

    Given the statutory context, I can find no reason to do violence to the language of section 91(1) by extending it to include the release of the interest of a joint tenant. I am unable to identify the mischief which makes such an extension necessary. A release does not foist a new and undesirable tenant on the Council as an assignment may. The problem is not under-occupation, or the tenant condition would be expressed differently. It does not lie in the liability to pay rent, for this should be covered by the tenancy agreement. If there is a problem with housing benefit, the solution lies in amending the housing benefit rules, not in distorting the statutory scheme providing security of tenure.

    In my opinion the Deed of Release was valid and effective to constitute Miss Burton the sole tenant. It follows that Miss Hannawin is no longer liable for rent by virtue of privity of estate. Your Lordships, however, take a different view and are of opinion that the Deed of Release was ineffective to divest Miss Hannawin of her interest. Accordingly it is not necessary to consider the effect which a valid Deed of Release would have had on Miss Hannawin's contractual liability to pay rent. As at present advised, however, and subject to any argument to the contrary (and to any possible effect of the Landlord and Tenant (Covenants) Act 1995), I incline to the view that the release or assignment of her interest in favour of Miss Burton does not affect her contractual liability to the Council but on ordinary principles entitles her to be indemnified by Miss Burton.


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